RBI Circular

RBI revised Norms to Streamline the Bill Payment Process

RBI revised Norms to Streamline the Bill Payment Process

The Reserve Bank of India (RBI) issued a directive, CO.DPSS.POLC.No.S1114/02-27-020/2023-2024, dated 29 Feb 2024, and addressed to all concerned Scheduled Commercial Banks, including RRBs, along with the Urban Cooperative Banks, State Cooperative Banks, District Central Cooperative Banks, NPCI Bharat Bill Pay Limited, and Non-bank Payment System Participants. The RBI directive concerns the Bharat Bill Payment System (BBPS) and declared the issuance of the revised regulatory framework, namely “Bharat Bill Payment Systems Directions, 2024,” which will supersede the existing regulations outlined in the circular DPSS.CO.PD.No.940/02.27.020/2014-15, dated 28th November 2014. The RBI, in its new direction, intends to streamline the process of bill payment systems to enable greater participation and enhance consumer protection. The regulation issued under section 18 read with section 10(2) of the Payment and Settlement System (PSS) Act, 2007(Act 51 of 2007) and will come into effect from the 1st of April 2024.

Optimize Operations and Protect Consumers: Revised Directions

The RBI directive issued concerns to the Bharat Bill Payment System (BBPS), which is a centralized platform used for the payment of various bills. The existing 2014 rules and regulations facilitate a tiered structure for the BBPS, with NPCI Bharat Bill Pay Ltd. (NBBL) serving as the central unit (BBPCU), Bharat Bill Payment operating units (BBPOUs) and their existing associated agent networks. RBI recognised the ever-evolving payment system landscape and the need for hours to provide updated regulations and introduced the revised norms accordingly, namely “Bharat Bill Payment Systems Directions, 2024.” Integrated bill payment platforms like Bharat Bill Payment System (BBPS), which enables payments and collection of bills using multiple channels such as different payment modes, like UPI, internet banking, cards, cash and prepaid payment instruments. This was decided in view of significant developments within the payment system landscape. However, the RBI has announced earlier the review and update of the regulations in its statement dated 8th June 2023 on Developmental and Regulatory Policies.

The RBI’s primary intent behind the revised direction is to streamline the entire bill payment process, enhance greater participation from different potential stakeholders, and ensure the proper implementation measures to protect customers. Such objectives are aligned with broader objectives of financial inclusion and efficiencies within the payment ecosystem.

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Moreover, the RBI directive significantly revised the existing regulations outlined in previous RBI Circular DPSS.CO.PD.No.940/02.27.020/2014-15 issued on dated November 28, 2014. This revised direction falls under the regulatory authority vested by the Payment and Settlement Systems (PSS) Act, 2007 (Act 51 of 2007). It ensures that all related regulations are legally enforceable and more likely to contribute to the stability and integrity of the payment and settlement system within the country. The RBI intends its commitments to adapt the regulatory frameworks for the ever-evolving landscape of the payments system in India and promote innovation, efficiency and overall consumer protection.

Master Direction- Reserve Bank of India (Bharat Bill Payment System) Directions, 2024

The Reserve Bank of India, exercising its conferred powers under Section 18 read with Section 10(2), seems to be satisfied and found to be necessary, thus making comprehensive directions for the Payment systems landscape within India, in the interest of the general public. The Issued directions are as follows-

1.     Short Title and Commencement

The RBI directions shall be known as the Reserve Bank of India (Bharat Bill Payment System Direction, 2024), and the same will be applicable from the starting month of April, i.e., the 1st of April, 2024.

2.      Applicability

The RBI-issued provision of directions will be applicable on-

  • NPCI Bharat Bill Pay Limited (NBBL- a wholly owned subsidiary of the National Payments Corporation of India) and
  • Upon the All Bharat Bill Payment Operating Units (BBPOUs).

4. Some Definitions under this Directive

Under this direction, the terms have the same meanings assigned to them as follows-

a)    Agent Institution

Any entity duly certified by NBBL that facilitates a customer interface, including both the physical and digital interface for bill payments.

b)    Bharat Bill Pay Central Unit (BBPCU)

BBPCU is an entity that operates BBPS and sets appropriate norms, including the operational, technical and business standards norms, and also undertakes the functions of clearing and settlements. NPCI Bharat Bill Pay Ltd. is an authorised BBPCU.

c)     Bharat Bill Payment Operating Units (BBPOUs)

BBPOUs are the system participants in BBPS. A BBPOU may either function as a Biller operating unit, a customer operating unit, or both of them.

  1. Biller Operating Unit (BOU) – This is an entity which boards the biller(s), either directly or indirectly via biller aggregator(s), on the BBPS platform for the purpose of the collection of its bills.
  2. Customer Operating Unit (COU) – It is an entity which facilitates its customers with an appropriate interface, including both physical and digital, to pay the bills, either directly or using the agent institutions.

d)    Bharat Bill Payment System (BBPS)

Bharat Bill Payment System (BBPS) 1 is an integrated bill payment platform that facilitates the payment collection of bills using multiple channels such as mobile apps, mobile internet banking, cards, cash, prepaid payment instruments, and many more. The transactions through this platform require the bill to be fetched prior to the payment initiation. In the case of transactions that involve payments for prepaid services, the customer’s relationship with the biller will be validated using this platform. 

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e)     Bill

Bill refers to the notice of payment duly raised by a biller for recurring or non-recurring payments. It may also include notices or advice for the recharge of prepaid services.

f)      Biller

Biller is an entity that includes the central and state government departments, public sector undertakings, and individuals who are directly or indirectly connected to BBPS through a biller aggregator for the purpose of collecting bill payments.

g)    Biller Aggregator

Any kind of entity which aggregates billers for the purpose of enabling them to connect with a BOU.

h)    Sponsor Bank

A scheduled commercial bank that facilitates a settlement with non-bank BBPOUs with NBBL.

i)       Technology Service Providers (TSP)

These are specific entities duly certified by NBBL to provide technology support and solutions to billers, BBPOUs, and agent institutions to integrate with BBPS.

5. Participants in BBPS

  • Bharat Bill Pay Central Unit (BBPCU)

NBBL, as the BBPCU, offers a platform that connects both the customers and billers through COUs and BOUs, respectively. NBBL is more likely to undertake clearing and settlement activities for all transactions routed through the BBPCU.

  • Bharat Bill Payment Operating Units (BBPOUs)

Banks likewise, all the scheduled commercial banks, including RRBs, Urban cooperative banks, state cooperative banks, district central cooperative banks, non-bank Payment aggregators (Pas), and all other existing entities duly authorised as BBPOUs, are free to participate in BBPS as operating units. Banks and Non-banks Pas, intending to operate as BBPOUs, will not need a separate authorisation. It is mandatory for them to intimate DPSS, RBI, and the Central office before operating the business.

6. Roles and Responsibilities.

The roles and responsibilities of the system operators and system participants are given below-

a)    Bharat Bill Pay Central Unit (BBPCU)

  • Rules and regulations must be set to govern the participation criteria and system operation.
  • Setting out the technical standards for the participants in the payment system.
  • Ensure that all transactions must possess a BBPS reference number from the initiation of the payment stage.
  • Ensure that no funds in the system flow through any TSP.
  • Facilitate a regulatory framework to resolve consumer disputes.

b)    Biller Operating Unit BOU

  • Onboarding billers to BBPS.
  • Ensure the proper compliance with due diligence requirements with respect to the onboarding of the merchants as duly prescribed in the Guideline on the regulation of Payment Aggregator and Payment gateways, 17th March 2020.
  • Ensure compliance with additional due diligence norms, which may be prescribed by NBBL for a specific kind of biller category.
  • Ensure due diligence of billers on board through the biller aggregators.
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c)     Customer Operating Unit (COU)

  • Provide digital and physical interfaces for customers either directly or through the agent institutions.
  • Ensure customers, along with the customers of their agent institutions, have proper access to all billers boarded on BBPS.
  • Facilitate a proper system to raise disputes.
  • Must take responsibility for their agent institutions’ activities, for which it is mandatory to engage with them in a contract with the COU.

7. Escrow Account Operations

  1. It is mandatory for a Non-bank BBPOU to open an escrow account with a scheduled commercial bank, especially for BBPS transactions.
  2. Non-bank BBPOU operates business as a Payment Aggregator (PA), at the time to collect funds from customers or settle funds with the billers boarded by it. For the purpose of maintaining an escrow account, the payment system operated by BBPOU will be deemed as a ‘designated payment system’ under section 23A of the PSS Act, 2007.
  3. Eligible credits and debits in the escrow account of COU are given below-
  4. Credit funds collected from customers.
  5. Debit towards the settlement of BBPS transactions
  6. Credit/debit of failed/disputed transactions.
  7. Recovery of Chagres/commissions concerns to bill payment transactions.
  8. Eligible credit and debits in escrow accounts of BOU are given below-
  9. Debit of funds due to billers.
  10. Credit towards the settlement of BBPS transactions.
  11. Credit, debit of failed, disputed transactions
  12. Recovery of charges/commissions concerns the bill payment transactions.
  13. It is mandatory for BBPS escrow accounts to adhere to the regulations outlined in the Regulation of Payment Aggregators and Payment Gateways dated 17th March 2020.

8. Complaint Management and Grievance Redressal System

  1. It is mandatory for NBBL to frame a dispute resolution guideline for centralized end-to-end complaint management in accordance with the RBI’s guideline on the Online Dispute Resolution (ODR) system for Digital payments, dated 6th August 2020.
  2. It is mandatory for all the participating COUs and BOUs to be integrated with the centralized system and ensure the customers and billers can easily raise disputes and resolve them, possibly in complying with the dispute resolution framework of NBBL. The BBPS reference number generated at the time of initiating any transactions will be used for dispute resolution purposes.
  3.  It is mandatory for COUs and BOUs to ensure that the failed transactions must be dealt with in accordance with the time period duly mentioned in RBI’s circular (Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions using authorised Payment Systems.)

9. Suppression of earlier BBPS-related guidelines

The mentioned directives have replaced the earlier existing guidelines related to BBPS-

S. No.Circular No.DateSubject
1.DPSS.CO.PD.No.940/02.27.020/2014-2015November 28, 2014Implementation of Bharat Bill Payment System – Guidelines (Updated as of May 26, 2022)
2.DPSS.CO.PD.No.605/02.27.020/2019-20September 16, 2019Bharat Bill Payment System – Expansion of biller categories
3.CO.DPSS.POLC.No.S-188/02-27-020/2021-2022June 14, 2021Bharat Bill Payment System – Addition of Biller Category
4.CO.DPSS.POLC.No.S-253/02-27-020/2022-23May 26, 2022Bharat Bill Payment System – Amendment to guidelines


In response to the evolving landscape of payment systems, the Reserve Bank of India (RBI) has introduced comprehensive revisions to the Bharat Bill Payment System (BBPS) with an intent to enhance the consumer protection and participation. This new directive are effective from April 1, 2024, and replaces the previous regulations and outlines a clear roles and responsibilities for various stakeholders, including the BBPS Central Unit (BBPCU), operating units, and agent institutions. Key provisions such as the establishment of escrow accounts for non-bank participants and the implementation of a robust complaint management and grievance redressal system. These measures showcase the RBI’s commitment to provide innovation, efficiency, and consumer confidence in India’s payment ecosystem.



  1. https://www.bharatbillpay.com/

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